Bitcoin (BTC) continues to build strong momentum as a potential inflation-hedge and store of value as it gains an edge over Gold. With the BTC price moving closer to $20,000, it has started decoupling itself from the yellow metal. Interestingly, some veteran investors like Raoul Pal have started liquidating their Gold portfolio and are shifting that money to Bitcoin and crypto market.
While the gold prices have appreciated nearly 30%, Bitcoin has outclassed nearly every other asset class with 175% year-to-date returns. BTC’s decoupling from Gold soon as the Bitcoin price has surged more than 80% so far in Q4 2020 and nearly 50% in November 2020.
The debate on Wall Street has heated up if Bitcoin can overtake Gold as an inflation hedge and portfolio diversified. However, Bitcoin is currently only 3.3% of the size of Gold. While the Bitcoin market cap is around $350 billion, the Gold’s global market cap is $9 trillion. Meaning gold is 26 times the size of Bitcoin at present.
“Our thesis is that Bitcoin is gold 2.0 and it will disrupt gold. If it does that it has to have a market cap of $9 trillion. So we think bitcoin could price one day at $500,000 a bitcoin. So at $18,000 bitcoin it’s a hold or if you don’t have any its a buy opportunity because we think there’s a 25x from here”.
Wall Street Is Carefully Observing Every Bitcoin Move
As per the latest Bloomberg report, Wall Street giants are closely observing the latest Bitcoin moves and the institutional money flow to BTC. A number of financial institutions, hedge fund managers, and billionaire investors have extended positive felling for Bitcoin over the last few months. Jean-Marc Bonnefous, a former commodities hedge fund manager turned crypto investor said:
“Gold was really the safe asset of the past world and baby boomer generation. Now it’s being replaced by automated assets like Bitcoin.”
Last month, JPMorgan analysts noted that family offices have started selling their Gold ETFs for Bitcoin. On the other hand, the Grayscale Bitcoin Trust (GBTC) has reported a 50% surge in November 2020, in its assets under management which is now above $10 billion. James Butterfill, investment strategist at CoinShares said:
“Bitcoin is establishing itself as a credible store of value. This is particularly appealing during this time of unprecedented loose monetary policy. For these reasons investors are naturally comparing it to gold.”